Antitrust and Competition

LA Law Firm (Legal Alliance) has been named “Competition Law Firm of the Year in Ukraine” according to the Corporate Intl Magazine Global Award.

We have handled antitrust and competition matters in almost every industry where they arise, including our key industry sectors.

Legal Alliance is proud to be legal counselor in several landmark cases in the sphere of competition on pharmaceutical market such as investigations of the Antimonopoly Committee of Ukraine regarding distributors contracts and marketing agreements with pharmacies.

OUR SERVICES

Dominant Position:

• providing legal advice to the business entities on dominant position as well as abuse of dominance;
• analyzing business contracts and internal documents of the client for the risk of abuse of dominance;
• minimizing the risk of negative consequences related to the violation of competition law in the form of abuse dominance;
• representing clients within the antimonopoly investigations on abuse of dominance;
• challenging the decisions of the Antimonopoly Committee of Ukraine on occupying the dominant position by business entities and abuse of dominance.

Concerted actions:

• providing legal advice on the necessity of obtaining permits for concerted actions;
• obtaining preliminary conclusions of the Antimonopoly Committee of Ukraine with regard to concerted actions;
• obtaining permits for concerted actions;
• providing legal advice on the risks of recognizing the actions of business entities as anticompetitive concerted actions;
• analyzing commercial contracts, preliminary agreements, internal policies on promotion of goods (works, services), cooperation with contractors, etc., as well as other documents for its compliance with the competition legislation or existence of violations thereof in the form of anticompetitive concerted actions;
• minimizing the risks of negative consequences related to violation of competition legislation in the form of anticompetitive concerted actions;
• obtaining Antimonopoly Committee of Ukraine recommendations with regard to the actions of business entities for the purpose of predicting anticompetitive concerted actions;
• representing clients before the Antimonopoly Committee of Ukraine within the framework of investigations of anticompetitive concerted actions.

Unfair Competition:

• providing legal advice on matters of unfair competition;
• protecting the violated rights of the client in the field of unfair competition;
• analyzing promotional materials, advertising campaigns for its compliance with the competition law, obtaining recommendations of the Antimonopoly Committee of Ukraine on its compliance with the competition legislation;
• analyzing documents / actions of business entities for the risks of any violations in the sphere of unfair competition;
• representing the clients within unfair competition cases in the Antimonopoly Committee of Ukraine;
• challenging the decisions of the Antimonopoly Committee of Ukraine on unfair competition;

Concentrations:

• providing legal advice regarding the necessity to obtain merger clearance;
• obtaining preliminary conclusions of the AMCU regarding the necessity to obtain merger clearances;
• structuring transactions in order to comply with the requirements of competition law;
• analyzing the formation of relations of control within a group of related entities;
• identifying breaches of competition law in the process of formation of a group of related entities, minimizing risks of negative consequences of such violations;
• obtaining merger clearances (including post-closing clearances);
• arranging and supervising merger clearances in other jurisdictions.

Public Procurement:

• providing legal advice in public procurement, drafting the necessary documents;
• providing legal advice at the appeal of public procurement procedures;
• representing clients within the procedure of challenging public procurement.

Investigations of the AMCU:

• advising on the provision of information on request of the Antimonopoly Committee of Ukraine;
• trainings for managers and employees of the company on antitrust and competition law;
• drafting competition compliance policies;
• challenging the decisions of the Antimonopoly Committee of Ukraine in the courts.

Competition Compliance:

• developing of the Competition Policy;
• standards of acceptable communications;
• typical disclaimers and reservations;
• developing of SOPs:
  • interactions with distributors;
  • interactions with retail (pharmacies);
  • processing of the AMCU’s requests and rendering of the AMCU’s audits.

OUR EXPERIENCE

• Representation of a healthcare institution when considering a complaint of a bidder at the AMCU regarding allegedly improper decisions of the customer.
• Representation of a hemodialysis equipment supplier during the appeal of procurement at the AMCU by several tender procedures.
• Representation of the interests of the hot meals supplier at the AMCU when appealing against the customer's decision to determine the winner of the bidding.
• Representation of pharmaceutical companies interests in the investigation of the Antimonopoly Committee of Ukraine regarding distribution contracts.
• Obtainment of Antimonopoly Committee of Ukraine conclusions regarding compliance of the marketing agreements concluded with the pharmacies and pharmacy chains with competition law of Ukraine.
• Legal support of a number of pharmaceutical companies in preparing responses for Antimonopoly Committee of Ukraine inquiries, received within the framework of a comprehensive study of the pharmaceutical market.
• Protection of interests of an international pharmaceutical company in the Antimonopoly Committee of Ukraine in a case related to violation of legislation on economic competition through anticompetitive concerted actions (by falsifying tender results).
• Protection of interests in Antimonopoly Committee of Ukraine at the appeal procedure of public procurement
• Representation of the interests of international pharmaceutical companies on issues related to antitrust investigations concerning advertising of medicines.
• Advising international companies on obtaining merger clearance and the risks related to accomplishing the deal without it obtaining.
• Representation of clients on matters related to unfair competition in the form of distribution of misleading advertising.
• Legal support of the interests of pharmaceutical company in the Antimonopoly Committee of Ukraine at consideration of the application of the complainant on unfair competition during advertising of biologically active supplements.

LANDMARK CASES

Marketing agreements with pharmacies

Agreements concluded between medicinal products’ manufacturers (their representatives) and pharmacies are considered by the Antimonopoly Committee of Ukraine (AMCU) as those with a high possibility to possess the signs of anticompetitive concerted actions. It is worth to mention that the service rendering agreements between the manufacturer and the entity that carries out the further sale of the manufacturer’s goods (so-called vertical agreements) are deemed as risky not only in Ukraine, but also in other countries, in particular in the European Union countries. However, in the European Union countries there are more clear recommendations of the competition authorities in relation to such agreements, allowing market participants to carry out the promotion of their products and be competitive with respect to security risks.

The AMCU position regarding the majority of marketing agreements issues is not yet finalized. Approaches that have been set out in the AMCU’s recommendations and provided to many pharmacy chains and suppliers of medicinal products are very conservative.

The most problematic issues in these agreements are the following:

1. Payment of bonuses or tailoring the cost of services to the volume of purchases.
2. Establishment of the plan of purchases from distributors.
3. Designation of minimum stock in pharmacies.
4. Provision of detailed sales reports.
5. Formation of services’ value.

Currently, the AMCU takes the position that, generally, the establishment of these conditions bears the evidence of anticompetitive concerted actions. We are of the opinion that this position is controversial.

In the nearest future, we expect more activities from the AMCU’s territorial departments on this matter.

In case the AMC qualifies the marketing agreement as anticompetitive concerted actions, the participants of such concerted action may be subject to a fine in the amount up to 10% of income (revenue) from the products sales for the year preceding the year in which the fine is imposed.

In April 2016, we gained a unique experience in this field. We managed to negotiate with the AMCU a marketing agreement with the pharmacy belonging to one of our Clients. Please refer to our web-site for the official press-release on this matter.

Within the framework of the completed project on marketing agreement coordination with the AMCU, we managed to convince the AMCU that the establishment of the above-mentioned risk conditions does not lead to the violation of the competition in the market.

In addition to this project, our experts successfully fulfilled 7 projects regarding the drafting and implementation of marketing agreements with pharmacies.